Organizational performance measurement systems are complex constructs that significantly impact leadership decisions, employee behaviors, and management processes and systems. Consequently, there are often many people, process, and technology challenges associated with the implementation or significant upgrade of such monitoring systems. By understanding these potential risks, leaders can put in place mitigating instruments to reduce the overall organizational impact and increase the likelihood that the new measurement system will be accepted and have the desired positive impact on performance.

Acceptance of a new or upgraded performance monitoring system centers on metric and report accuracy. Executive, manager, and employee confidence in measurement accuracy is critical to establishing and maintaining the trust needed for the information presented to be used to support decision-making and to drive action. In our decades of performance measurement system implementation experience, challenges to organizational trust include:

Personnel Related Challenges

Processes from which metric and report data is sourced are not rigorously followed

Ongoing maintenance/development of metrics and reports are highly reliant on the knowledge and skills of a single individual

Personnel maintain and gather metric and report data differently or from differing applications

Document/Report coding is changed without a documented / communicated reason

Many individuals do not understand system data structures and relationships. Consequently, they misinterpret reports and metrics

Many individuals believe exceptions are used to artificially inflate reported performance; most notably because of the recoding that occurs to place previously counted objects into excluded categories

Process Related Challenges

Metric development processes are not well defined

Processes from which metric and report data is sourced are frequently changed

Metric and report definitions are undefined or vaguely defined

Metrics have numerous exceptions that makes individual metrics difficult to calculate and easy to manipulate; degrading the organization’s confidence and trust in the performance measures

Technology Related Challenges

There does not exist a single, organization-wide application for collection of non-system related data needed to generate metrics and reports

Data warehouse not optimally configured for metrics and reports generation and data analytics

Interface failures do not trigger an alarm or notification. Errors only become apparent in generated metrics and reports

Significant use of desktop spreadsheets and databases to combine and manipulate data into a usable form

Needed data is not captured by supported systems and is instead resident in desktop spreadsheets and databases

Needed data is not widely accessible for use in ad hoc reports

A data historian is not used to capture point-in-time data snapshots

Systems are not configured to capture the date-time of data changes

Some data fields do not have sufficient security to prevent inadvertent changes resulting in erroneous reporting

Systems are not configured to capture the identity of the individual making data changes

Organizational and equipment hierarchies are not accurately reflected within the enterprise resource planning system

Every organization’s circumstances are unique. By assessing current state conditions for the existence of these underlying challenges during the organizational performance measure system development/upgrade project, leaders position themselves to mitigate these risks. Such mitigation often translates to the degree of implementation success and the system’s overall return on investment.

Additional Resources

Numerous other StrategyDriven articles provide elaborating information on how to avoid/address many of the challenge points above including:

Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

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